How Much Should You Spend on Marketing? It Depends – Where Are You Going?

2013 March 19 | by Armen David | Executive Director

Many people ask us how much they should spend on marketing. Of course, we're tempted to say "as much as possible," but such self-interest doesn't create strong client-agency relationships. Instead, as good marketers, we ask about their needs and interests. What do they want? The problem with that question: everyone answers, "As much as possible for the least amount of money."

So we try a different approach, and we use a driving metaphor that everyone in L.A. can relate to. It goes like this:

Imagine that you're about to take a road trip. How much money should you budget for gasoline?

Of course, you answer, it depends on where we're going.

Exactly.

And that's how you budget for marketing: you start with your destination, then determine how much "fuel" you'll need to reach it. Of course, it's more complicated than that, so we ask related questions:

How soon do you need to get there? The faster you want to go, the more fuel you'll burn. The answer also determines the type of vehicle (or media type) you'll need to use.

Want to take the scenic route or the express way? The straight shot is fast and easy, but your passengers (customers) might get bored and catch a ride with someone more interesting. Scenery (creativity) costs more, but that's what attracts passengers and keeps them engaged and committed.

How much traffic is on your road? If your route is jammed with other drivers (competitors), you'll burn more fuel in the heavy traffic. The other option is to take a road less traveled (a differentiation strategy). That may be riskier, but it provides clear sailing since you'll own the road.

As you can see, planning a marketing campaign is like planning a road trip: it should begin with a goal, then calculate all the ways to get there. That's more complicated and painstaking than saying, "I've got some money, ROAD TRIP!" but it's much more likely to get you where you want to go.